The words ‘good governance’ have been tossed around in health care circles over the last decade as if it were a panacea to mean that everything is fine. However, the crucial aspects of governance and how to implement an integrated governance system that operates effectively between corporate and clinical governance are poorly understood in many systems around the world.
Problems in governance of healthcare emerge when:
- one of the elements (corporate or clinical governance) is weak or underperforming;
- the linkages between corporate and clinical governance are not understood and respected inside the organization;
- the boundaries between corporate and clinical governance are not effectively managed.
Effective corporate governance in health care
Corporate governance is a multifaceted set of processes, policies, regulations, laws, organizational structures, people, and customs. These should all work in concert to assure the quality, accountability and effective management of an organization as a whole. The highest level of corporate governance in a healthcare organization (often a Board of Directors or Trustees) should ensure that:
- results are delivered, and
- resources are prudently managed.
The board of a healthcare entity discharges these responsibilities in the same way as any corporate board does through activities such as:
- appointment and evaluation of the CEO;
- engagement with the CEO and senior management in setting the strategy of the organization;
- identification and management of any real or perceived conflicts of interest among directors and/or officers;
- assessment of the contributions of each individual board member as well as the collective performance of the board;
- enabling the chairman to effectively discharge the special responsibilities as a “first among equals”;
- ensuring that new board members are thoroughly oriented to the organization and the operations of the board;
- underscoring that the interests of the stakeholders are paramount (in the case of a healthcare entity, this is the community the institution serves);
In the case of healthcare organizations that have a board that sits under a corporate parent or government controlled health system, there are additional responsibilities for the board to ensure that:
- the delegations, expectations and accountabilities from the parent organization are clearly understood by the board and management, and that
- potential points of discord with the parent are respectfully and clearly transmitted upwards.
Much more can be written about corporate governance in general at another time. However, two key practical elements deserve special mention:
- Accountability – well functioning boards define clear lines of accountability for the CEO and his/her team (e.g. most operations) and reserve certain accountabilities squarely for the board per se (e.g. audit). Accountability involves formal delegation of responsibility and intermittent review of such delegations.
- Transparency – effective boards operate openly and transparently. This is especially important where society places the trusteeship for its health care in such an entity.
A final word on corporate governance in health care – all of the above is rather straightforward, so where is the problem in ensuring that healthcare institutions around the world are well governed at the corporate level? The confounders are people and customs. These variables often complicate the effect conduct of board functioning. Common people problems in healthcare corporate governance include:
- Failure of elected /appointed representatives of interest groups to realize and accept that they do not carry the interests of their appointing / electing group into the boardroom. Their role on the board is to solely act for the good of the entity on whose board they sit.
- Inexperience or inability of senior management to actually implement the strategies of the board within professional sectors of the organization, which are accustomed to idiosyncratic and autonomous behavior.
Many boards and leaders also fail to understand that customs are powerful influences within organizations. The difficulty of changing the customs of action and behavior for large parts of institutions often presents an insurmountable problem for a board to see its mandates carried out. This raises the issue of how to manage institutional cultural set points, which is a subject for another discussion.
Effective clinical governance in healthcare
The name clinical governance emerged in the United Kingdom where the National Health Service defined clinical governance as a framework through which organizations are accountable for continually improving the quality of services and safe guarding the high standards of patient care by creating an environment in which excellence in clinical care will prevail.
The basic elements of clinical governance/quality-safety include:
- emphasis on education and training for professionals;
- clinical audit systems – cyclic review of clinical performance against measurable standards with changes in clinical practice upon such review;
- assessment of clinical effectiveness – whether a particular action works and whether it represents value for expenditure etc.;
- research and development – to generate evidence to inform decisions about policy and implementation changes;
- openness – to enable frank discussions about safety and quality matters while respecting confidentiality of patients and providers;
- committees and processes to ensure that these elements occur;
- risk management components – in some jurisdictions, these are included in clinical governance whereas, in others, formal risk management is handled separately.
In the realm of clinical governance, people and customs are the same confounders. Implementation requires that long-standing rivalries between professional groups and personalities be managed. Deeply entrenched cultural systems and customs of practice have to be broken down and rebuilt.
Linkages and Boundaries between Corporate and Clinical Governance
Corporate and clinical governance can each have intrinsic problems. However, the linkages between corporate and clinical governance should be clear. Under delegation from the board, the management team should implement the clinical governance systems and processes around patient safety and quality. A key aspect of that work is to report to the board (and therefore the wider stakeholders such as parent organizations and the community) that:
- delivery of high quality clinical services is happening and that it is measurable and effective;
- patients are being consistently cared for a safe manner; and that
- the mechanisms to constantly improve upon prior outcomes are in place.
With regard to clinical governance, the role of the board is to:
- endorse policies and clarify expectations regarding the desired outcomes for the CEO and management team with respect to patient safety and quality;
- receive, review and react to regular reports on clinical performance from the CEO and management team.
- expect that such reports should be sufficiently detailed so that the board can assure itself that the organization is performing in accord with formally recorded expectations but not be so exhaustive that potential problem areas are lost or disguised in the detail;
- Assure themselves that appropriate remediation steps are activated for problematic areas.
The boundaries between corporate and clinical governance should also be clear. First, it is important to recognize that corporate governance covers many matters not touched upon at all by clinical governance (details of finance, capital works etc.). Second, it is the clinical governance arm which deals with implementing the detailed processes and structures needed, not the board.
The problem is often again people and entrenched customs. When change is needed to improve patient safety or quality of care, people and entrenched customs often confound the orderly systems which are needed to ensure success. Much more can be written about these elements but for the moment, effective implementation of corporate and clinical governance requires that:
- the board, senior management and clinical leaders understand corporate and clinical governance, how they are linked and their respective boundaries;
- delegations and expectations are clearly understood if there is a parent organization or central government agency involved;
- intensive training programs are in place for corporate boards, especially at times of transition and change;
- boards conduct self evaluation, and, for inexperienced boards, they seek coaching and mentorship;
- continuous feedback loops among key stakeholders are in place to create an environment which promotes constant improvement of the interface between corporate and clinical governance and ultimately the safety and quality of patient care.